Healthcare – Is it a good or a service?

It seems pretty straight forward; healthcare-cloudhealthcare is a service, right?  Healthcare ticks all the service boxes, it’s not that tangible, you can’t touch it or hold it. You can’t really try before you buy and there is very little freely available objective information to evaluate the quality of the product. Beyond of course the valued opinion of your best friend’s second cousin who often makes an impassioned recommendation about their favourite service provider.  Healthcare is highly perishable; just ask anybody who has missed an appointment at their specialist and subsequently begged and pleaded for another appointment sometime in the next millennium – once the appointment is missed its gone. Healthcare is also necessarily highly variable, we are all individuals and need to be provided healthcare that is suitable and tailored to our individual needs. Open and shut I hear you say, but perhaps not. There are no doctors or nurses working at Telstra, and yet they are investing heavily in the healthcare market, with a blueprint for the future. But what are they selling; goods or services and why does it matter? If all good marketing theory tells us that the inherent differences between the nature of goods and services i.e. intangibility, variability, perishability effects the way in which we evaluate their worth, apply value and interact with the product, then it is obvious that we need to know if we are marketing a good or a service. Some of the Telstra products appear to be adjuncts or supports to traditional healthcare, such as IT solutions to integrate health records, education tools and directories. Other products go a little further and enter into the space of healthcare services, specifically automated monitoring. Where we might go to the doctor to have our blood pressure or glucose monitoring done, we can now rely on a mobile app. An app will check these parameters, let us know when there is a problem and provide dietary guidance. Could this see the eventual obsolescence of General Practitioner services? So how should a mobile app such as this or the remote monitoring as promoted by Telstra be marketed? It seems to be neither a good nor a service, but a little of each. The concept of an intangible good is worth considering at this point. Intangible goods are things like on-line content, mobile apps and e-books, with the same attribute of intangibility as services; however they are distinctly different from services in their level of variability and perishability. In the instance of a mobile app you can see a demonstration, access a trial period or purchase the app for a relatively small price in order to trial the product. In addition you have access to consumer ratings and unlike traditional healthcare services, if you don’t access it today, it will still be there tomorrow.  All of which suggests that the marketing of such intangible goods, is more akin to traditional goods.

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Perhaps this heralds a new era in how we receive our healthcare, only time will tell! But perhaps not so far into the future, instead of calling our doctor we will instead go to the app store and download a cure to our ails.

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3 thoughts on “Healthcare – Is it a good or a service?

  1. I think you raise a very interesting point, and one I have not thought a great deal about despite the fact that I work for a pharmaceutical company that owns a variety of pharmacy brands. Many brands within retail pharmacy are implementing ‘professional services’ programs wherby the pharmacy offers basic health services such as flu vaccinations, blood pressure checks, diabetes checks etc. The idea is to provide a new revenue stream for pharmacies (pharamcy profitability has been hindered in recent years due to changes to the Pharmaeutical Benefits Scheme) and to differentiate pharmacy as a destination where customers receive valued service (rather than other retail outles such as supermarkets who hold some common products). Rightly or wrongly within the company I work for the suite of ‘professional services’ are marketed as a service, despite the fact that in some cases the service actual involves a physical product i.e. diabetes screening tests. The rationale for the ‘service’ approach in the marketing is that it links in with the strategic objective of enhancing the consumers perception of retail phramacy as a destination for professional, credible and respected service.

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  2. Thanks for your comment and thoughts. I too work in healthcare and it is certainly a rapidly changing market. I wonder if there will be many ‘pure’ service providers in another 5 or 10 years particularly in the primary health market, or if the self service products will completely take over? Thereby changing the very nature of what we currently consider healthcare services. I guess the name of the game is to be aware of these changes and try and adapt our services accordingly.

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  3. What I see here is a very dangerous trend of self diagnosis and self treatment in association with an app which has some inbuilt logarithm. The human body does not work as per these algorithms. Physical examination is an inherent part of diagnosis and treatment you can’t get away with.So far these apps have shown only limited utility as a stop gap arrangement till you actually get to see your physician and it should work just so. In a scenario when an untoward reaction happens to the patient with the treatment prescribed by the app or perhaps a doctor on phone without actually examining the patient what would be the take of insurance companies? Will they still bear the treatment expense? and in worst possible scenario some irreversible damage happens to patient due to partial or wrong treatment, whom would he sue, the app or the tele-doctor?

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